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Deciding on whether Service Tax is payable or not

March 2, 2015

If you are engaged in providing service to your customer, please check:-

Whether the service rendered by you is falling under the scope of any of the taxable services as per the list

Whether there is a general or specific exemption available for the category of service provided under any notification.

Whether you are entitled to the value based exemption available for small service providers as explained below.

Liable to pay Service Tax?

Generally, the ‘person’ who provides the taxable service on receipt of service charges is responsible for paying the Service Tax to the Government (Sec.68 (1) of the Act),

Threshold Limit: Threshold limit is the limit up to which no service tax is payable even for the services that are taxable in the normal case. This is referred to as General Exemption

Service tax is payable on amount received against service rendered. Hence, when service provider’s receipts exceed Rs. 10 lakh for the financial year then he has to pay service tax.

When the receipts touch Rs.9 lakh he has to get registered under Service tax, if service provider’s receipts exceed 10 lakh then he has to pay service tax.

With effect from 1st October, 2014, the Central Board of Excise and Customs had made it mandatory for payment of tax/duty electronically through internet banking for all Central Excise and Service Tax Assesses (Please Notification No. 19/2014 -Central Excise & Notification No. 9/2014 – S.T. both dated 11th July, 2014) except in exceptional cases to be recorded by Divisional Assistant / Deputy Commissioners.”